Lammhults Design Group AB

And a warm welcome to the presentation of the second quarter for Lammhus Design Group. My name is Susanna Hillesko, I am the CEO and CEO of Lammhus Design Group and on my side I have Jesper Langebro who is CFO. Let's start the presentation. And we note that we continue the year in a stable way. We have a development that is in line with the first quarter, even during the second quarter. We have an order entry in the group that is at the level of Q2 2020-2024. And we have an order stock at the end of the period that is 23% higher compared to the previous year. This gives us positive outlook for the second half of the year. The sales during the quarter were on the same level as in 2024. The adjusted gross margin increased from 3.3% to 37.2%. The adjusted sales result improved from 13.8 million to 0.2 million kronor compared to previous years. If we look at it from a business perspective, we can see that the gross margin has improved by 3.3%. This is a result of the implementation of margin-raising measures. It is a collection of different measures in a larger or smaller scope. We are talking about price increases, we are talking about higher capacity utilization and cost savings within the production organization and supply chain. Förbättringen av det justerade rörelseresultatet med 13,8 miljoner till 0,2 miljoner plus är då relaterat till verksamhetseffektiviseringar, då pratar vi marginalhöjande åtgärder igen, kostnadskontroll, ökad samordning och synergier. Vi konstaterar även att åtgärdsprogrammet som lanserades 2024 ger effekt And we still expect that a larger part of this program will show results at the end of 2025. And we have two business areas, partly the Office Interiors business area, which undergoes a transition with the coordination of the sales organization, a new go-to-market strategy. And we also coordinate on a functional level over the company boundaries. In the second business area, Library Interiors, stable results are delivered. We focus on further efficiency and launch a new business system that creates opportunities for higher internal efficiency, better customer experience and growth in the future. We also see clear signs that the new Go-To-Market strategy, which was first launched in Norway, is already at the forefront. visar konkreta positiva resultat i form av större livgenerering, högre orderingång och högre försäljning och utrullning av motsvarande arbetssätt pågår i Sverige och Danmark. Och vi fokuserar på lönsamhet, interneffektivitet och tillväxt och vi konstaterar att marknaden är fortsatt osäker med en hel del försäljningar i projekt och leveransen. Om man tittar On the business, a little hands-on, a little closer to what we work with, we have launched here during the quarter a new website together with a new brand story. We are talking about Scandinavian Design Multiplied. The idea and other meaning with this is that our ambition is to deliver a result of our brands and the entire product portfolio that is larger than the individual units themselves. On the digitalization side, we have mentioned it in several contexts in the last quarter, it is digitalization with customer use in focus within Office Interiors in the first place. There we see a launch during the quarter from Lammhults, where the entire Lammhults product range is now available in the digital tool Picon, which facilitates for partners, designers and resellers. to design and present implementation solutions. And we have also launched a new education platform within Office Interiors, which is both for internal and external use. When it comes to Library Interiors, we also digitize here with primarily a focus on internal efficiency, but also improved user experience. A new business system that has been implemented during the quarter. A work that has been going on for a long time and has been implemented in a successful way in the organization. We focus on design and deliver some news to the market that has been presented in connection with various events here during the quite event-rich quarter that Q2 usually is. Here we see examples of new releases from our various brands that were presented here at Three Days of Design in Copenhagen in June. And we have also had a press release to the market that informs us that we are continuing investments in design, product and product development, or portfolio development within the framework of our coordination and our strategy forward. and we have started a strategic collaboration with Christiano Pigazzini and Note Design Studio. This investment is made in combination with the increase of our own internal resources in product and portfolio development and new investments on that front. When it comes to goods and brand exposure and networks, it is also mentioned in the report that Q2 is usually a heavy quarter when it comes to costs related to market investments. events that are relevant to our business. And here are examples of where we have participated. Trends and Traditions in Copenhagen, Clark and Well Design Week in London, Three Days of Design in Copenhagen and also the Milano Fair earlier this spring in April. Also at Library Interiors, you can show off your offer and you have done so in connection with a a meeting place in Bremen, which is the largest in Europe in the library industry. And in connection with 3Ds of Design in Copenhagen, we launched a new showroom concept. We have spoken a lot in our communication that our ambition is to go from selling products to offering entire solutions. And it is actually the launch of this concept that we have presented in connection with 3Ds of Design, where we go from products to inspired whole experience, where we see that our products and solutions combine each other and complement each other in a very good and effective way to be more relevant to our customers. And then we have left it a little more business-oriented description and then we go to the numbers part and then I leave the word to Jesper.

Thank you, Susanna. You have already heard some of the most important points in the results of the second quarter. But I will continue to go in depth on some things. In ordinary order, we talk about order entry and order stock. And as you can see, the order entry is at a level with what it was in the corresponding quarter last year. 241 million, almost spot on. And it's still a good development for us. We have, as you can see on the diagram, the white lines, we have increased the last three quarters. It plans out a little here in Q2, but the order block is still growing as It usually does seasonally. The order volume is now up to 234 million, an increase of 44 million compared to the same period last year. We usually say that the order volume is a good indicator of next quarter's sales results. We want point out that this order stack is stretching a little further than usual. So we can say that we feel a certain satisfaction with how we are before the second half of the year and are very happy with this increase. We feel quite good, in a good position before the start of the second half of the year. If we look at the different business areas, you can see that the order entry is a little lower for office interiors and it is up for library interiors. No big numbers, a fairly stable development both at the business area level and at the entire company. It is worth mentioning that both two increases on the order stack and a really strong increase of almost 40% for the library, which is ready to deliver in the second half of the year. If we go on with the turnover, we have come out of the decline and decline that we experienced during 2023-2024, from the middle of the two years. And we are showing here on a rolling 12 basis the third quarter in a row with a stable turnover. By stable we do not mean that we are satisfied with it, but we have broken the trend, we have stabilized the business. And the next step, as Susanna says, is to get ready to be able to benefit from a market growth. Vår omsättning landade på 212 miljoner, nästan identisk med vad den var andra kvartalet 2024. Det är nästan oförändrat både på Office och Library. Library är identisk på 61 miljoner. Office har en liten, liten ökning, men det är egentligen försumbart att landa på 152 miljoner i omsättning. Ni hör oss prata om hur det utvecklas på olika länder och olika huvudmarknader och värt att nämna kanske är att just Norge går av hur marknaden är i Norge men också What we experience are positive effects from the programs that we have worked with. And as Susanna mentioned earlier, the go-to-market model in Norway that we experience gives results. And the fact is that Norway has now risen and has risen and is actually our individual largest market in the office business area during the second quarter. As for the library, it has shifted from market to market between months and quarters. This quarter we have a good development in Great Britain and Denmark. A little weaker in France compared to previous years. But we experience that it is a strong and good market. France is our largest individual market in the library business area. And they had a very good second quarter of 2024. So it's nothing that makes us worried about that development. As we said earlier, the order stack is strong. The order entry has been strong for Library during the second quarter and they are well-equipped for the second half of the year. If we then look at the adjusted turnover result, then given the circumstances, that is to say a stable non-growth on sales, we are very pleased with the result. We have improved with almost 14 million kronor per quarter and come just above the zero line and end up at 0.2 million. i rörelseresultat. Vilket är en liten liten positiv marginal jämfört med minus 6% föregående år. Och rullande 12-kurvan eller last 12 months är väl ännu tydligare i diagrammet att vi rör oss uppåt. Vi har nu två kvartal med oss i detta året. with between 10 and 14 million improvements per quarter. We had a development that started already in the fourth quarter under 2024. As I said, we are looking forward to the development. Our harvest program gives results and we try to work with moving forward our market positions and be able to take both market shares and take advantage of markets that are starting to move, such as the Norwegian market for office. As Susanna said earlier, we have an improved gross margin on the company. And we have lower costs. And our response program affects both of these positions in a positive direction. And we estimate that we have with us about 7 million in improved movement results from the response program during the second quarter. These improvements are visible in both business areas, but especially in office, where we have an improved movement result with almost 13 million. And we see that the improvement comes from a higher gross margin on a stable turnover and lower costs, which comes, among other things, from the action program. And within the library, we also have a weakly positive result during the quarter, where we do not have the same effects. We do not have a program in the same way as in the office, but we of course work with business improvement measures. And even in the library, we see better gross marginals. However, a slightly higher cost for investments to deepen our market position on existing markets continues. But it also gives effect. So, to sum up the results, a good development since the third quarter of 2024 and we will continue this journey. Kassaflödet är något negativt i kvartalet men det är ingenting heller som sticker ut säsongsmässigt som så allvarligt. Om vi delar upp det i sina beståndsdelar så har vi ett svagt positivt från den löpande verksamheten. Den löpande verksamheten är dels vårt resultat från resultaträkningen och förändringar i rörelsekapitalet. And it is of course the major improvements to the turnover result that help us in these positions. We have a weak negative effect when it comes to turnover capital, but that is completely seasonal. We have a high sales in June that binds some customer orders. When it comes to the investment business, it is mostly active expenses for R&D. and the implementation of new business systems for the library business area. They are almost half of what they were last year, when we had large investments, among other things in solar cell facilities for Abstrakta. So again, the investment business is under control and we choose which investments that feel right and have the right financial impact in the future. We also include a term we call free cash flow, including leasing. Leasing, amortization, in registration rules, are actually ordinary rents. So we work with this term to have a fully operational cash flow. Det är dock då lite negativt på minus 7,2, men väldigt mycket bättre än föregående år. Nästan 12 miljoner bättre. Det kommer som sagt från de investeringarna vi gör och vi har säsongsmässigt resultat som vi har. Det ni ska ta med er härifrån är en förbättring på 12 miljoner. on the free cash flow and there is a lot in hand with the result improvement we have during the quarter. A little bit about our key figures we work with and we usually summarize some of them. The turnover is stable during Q2 both towards the second quarter of 2024, but also towards Q1 this year. Adjusted movement margins increased to a very low positive compared to very boring minus 6% previous year. And it is a mixture of, as I said, gross margin and costs that help us. The solidity has decreased slightly compared to last year's quarter, but not compared to Q4. This is due to the measures we took in Q4 last year. So it is stable on that level. The net debt is actually the same thing. It is a natural small decrease. And that is from the negative cash flow that actually drives the net and debt. Nothing is strange about that either. And of course we follow our average number of employees that are developing, if I may say so, in the right direction. We are now on average 265 FTIs in the group at the end of the second quarter, which for us is an improvement, an effect of the measures we take to land our organization in a way that we are both effective and reach the market in the right way.

And then we come to a summary. And what we see is that we have a starkly improved result in the second quarter. The invested turnover result was improved by 13.8 million to 0.2. And we see this improvement in both business areas. The invested gross margin matched with 3.3% and also here an increase in both business areas. The order entry and sales at the company level is in line with previous years and a continuously dampened market, primarily related to the business area Office Interiors. When it comes to the supply program, this continues in the quarter with the reorganization of the business area Office Interiors sales organization and we have started our function coordination over the company borders. And we handle parallel Arbetet med satsningar, besparingar, samordning med kundnytta i fokus för att framåt få en stärkt marknadsposition när marknaden vänder. Vi siktar fortfarande, som vi har kommunicerat tidigare, mot tillväxt för att vara ett växande bolag och en ebit-marginal på 8-10% som vi siktar på att uppnå under 2026. That brings us to the end of the presentation. Before we end here, we would like to mention that we will also be active on the market during the second half of the year and participate in a number of events. Here is a list of them. If you have the opportunity, you are very welcome to visit us, both here and there, and you can see the date and place for these different events. And I can say that what we look forward to the most in terms of design is Saturday, which will be an event here in September on the Norwegian market, where we are extra happy to show a new showroom with a new go-to-market strategy on a market that is going very strong, as Jesper mentioned earlier. And with that, we are well ahead with questions and answers. Vi får se om det har kommit in några frågor. Vi får se.